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    This post addresses monopsony power.

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    One method commonly used by both governments and private health insurers to control the growth in health care spending is limiting the reimbursement to providers. How can these limits to reimbursement be viewed as the exercise of monopsony power? To prevent health care providers from prescribing more services, it is often common to limit approval of services to health care recipients. How is this practice affecting recipients of Medicaid and Medicare?

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    Limits to reimbursement that are imposed by governments and private health insurance companies can be viewed as an exercise of monopsony power because the policy holders are more numerous than the government, and therefore exercise more power, because the policy holders drive demand for services up or down, based upon which ...

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    The solution provides a detailed explanation of limits to reimbursement are monopsony power.